XRP price risks falling to USD 2 after confirmation of a classic bearish pattern
The open interest in XRP futures has sharply declined in the last five days, creating bearish prospects for the price of XRP and a potential pullback to the important level of USD 2.
XRP could be heading towards USD 2 after breaking a classic head and shoulders pattern.
The decline in open interest in XRP futures signals weakened confidence among traders.
The price of XRP
is showing warning signs as a bearish technical pattern resolves on shorter time frames, coinciding with massive liquidations of long positions and a decrease in open interest.
The H&S pattern of XRP suggests a price drop of 14%
The price action of XRP has formed a head and shoulders (H&S) pattern on its four-hour chart since May 9, projecting a likely downward move.
The head and shoulders pattern is a bearish reversal pattern that can signal a trend change. It consists of three peaks: one higher peak (head) and two lower peaks (shoulders).
It resolves when the price breaks below the neckline (the line connecting the lows of the left and right shoulders), confirming the pattern and suggesting a possible sell signal.
In the case of XRP, the pattern was validated after a break and close below the neckline at USD 2.33 during the early hours of Asian trading on May 19.
If the price remains below the neckline, the XRP/USD pair could slide further to USD 2.25 (where the 200-day simple moving average currently lies) and then to the pattern target of USD 2.00. This would represent a total loss of 14% from current levels.
